Non-latin & extended characters in Profile fields break MNet authentication

FULL STEPS:

• Configure two Moodle servers as MNet peers
• Create a user with non-latin or extended characters in any of the following Profile fields:
  • firstname
  • lastname
  • department
  • address
  • description
  • others?
• Navigate to MNet peer

WHAT I EXPECTED:

Successful navigation between MNet peers

WHAT ACTUALLY HAPPENS:

Error message:
Unknown error occurred during negotiation.More information about this error
×Debug info: 
Error code: unknownerror

×Stack trace:

• line 496 of /lib/setuplib.php: moodle_exception thrown
• line 262 of /auth/mnet/auth.php: call to print_error()
• line 51 of /auth/mnet/land.php: call to auth_plugin_mnet->confirm_mnet_session()

We first noticed this problem several months ago with Cyrillic characters. Today we noticed it again with Romanian diacritics and Greek characters.